Beaumont Health System, Botsford Health Care and Oakwood Healthcare have reached a definitive agreement to combine their operations into a new $3.8 billion health care organization following unanimous approval by their boards on Monday.

Under the terms of the definitive agreement, the three organizations are creating a new, not-for-profit Michigan health system called Beaumont Health. The Beaumont Health name was chosen to demonstrate the new system’s focus on health and wellness and was based on independent market research showing the regional and national strength of the new name. The name also has historical ties to pioneering Michigan physician and medical researcher, Dr. William Beaumont, whose medical research and innovations are recognized globally.

The three organizations announced a letter of intent on March 21 to integrate their combined eight hospitals and 153 other patient care sites into a new comprehensive, collaborative health system focused on advancing quality and access to care throughout the region.

“While Botsford and Oakwood have outstanding names and brands in their primary communities, we chose the name ‘Beaumont Health’ because of its recognition and strength throughout all of Southeast Michigan and on a national level,” said Oakwood Board Chairman John Lewis, who will be the future chair of the Beaumont Health board. “The new health system will be a national model and the name paves the way for an even stronger national voice in the future of health care delivery. And the word ‘Health’ represents our combined goal of improving the health of individuals, families and employers in the communities we serve.“

Beaumont President and CEO Gene Michalski, who will serve as initial CEO of the new health system, heralded the hard work, respect and collaboration that led to the agreement.

“This milestone demonstrates our mutual commitment to working together to improve quality, efficiency and value for our patients,” Michalski said. “We’ll be able to share and build on our individual successes and will stand stronger together during a time of major transformation in the health industry.”

As announced in March, the new health system will be governed by a single board and executive leadership structure with representation from the three organizations. Michalski, Oakwood CEO Brian Connolly and Botsford CEO Paul LaCasse, D.O., will all serve on the CEO Council, overseeing the transition and implementation of the new system. Michalski will chair the CEO Council. Connolly, LaCasse and Michalski will remain as president and CEO of their respective organizations during the period of transition. Connolly is serving as chief transition executive and Dr. LaCasse is serving as clinical transition executive on behalf of the CEO Council.

“The work to integrate these three great organizations, while challenging, is progressing well,” Chief Transition Executive Brian Connolly said. “We see the signs that we are indeed creating the health care system of the future – a system in which population health can truly be impacted in a very positive way while increasing quality and value for every family we are fortunate to serve.”

Physician collaboration and integration is another key priority for the new health system.

“We want to continue to engage all our physicians in driving clinical standards, performance, programs and services, and to expand opportunities to partner with community physicians and other care providers to better serve patient needs and secure the future for our physicians,” LaCasse said. “This includes the physicians we are training through our graduate medical education programs and medical school relationships.”

The final steps in coming together are state and federal regulatory approvals. With these approvals, the organizations expect to close the transaction in the fall.

Work will also continue to develop detailed transition plans to bring the operations of the three organizations together and to finalize details, such as a location for executive offices and the appointments of board members and the new health system’s executive team.

The names of the eight individual hospitals will be linked with the Beaumont Health name and brand in a manner to be determined over time.

“We recognize and respect the community’s connection with these legacy names and their strength within their markets. So, we will take our time and seek inside and outside counsel in developing a plan for communicating the new brand,” Michalski said.

A website for the new health system, beaumonthealth.org, has been created to keep the community informed of progress.